Marathon announces discovery at Kasilof well

Posted: Tuesday, August 31, 2004

By TIM BRADNERMorris News Service-Alaska - Alaska Journal of Commerce

Marathon Oil Co. says it has a new natural gas discovery in Cook Inlet. In an Aug. 13 briefing for news reporters in Anchorage, the company said its Kasilof exploration well drilled last year found gas. Details of the discovery, such as the rate of flow and an estimate of reserves, were not disclosed.

John Barnes, Marathon's Alaska business unit manager, said the company still is evaluating whether the discovery can be commercially developed.

The well, completed last February, was drilled directionally from an onshore location near Kasilof to an offshore prospect. The well also is the first "multilateral" well drilled in southern Alaska. Both legs of the multilateral well encountered shows of gas, Barnes said.

A directional, or extended-reach, well is drilled at an angle from the surface location of the drill rig to an underground target prospect that can be several miles from the location of the rig. The Kasilof well had a horizontal reach of 14,000 from the rig, which was onshore.

Extended-reach wells are expensive and must be drilled with a large drilling rig, but are useful in reaching prospects that are near shore without the expense of using an offshore drill structure like a jack-up rig or a drillship.

A multilateral well has two wells drilled underground from a single well-bore drilled from the surface. The technique can reduce the cost of wells drilled into the producing formations, and also reduces environmental impacts on the surface because the infrastructure is shared by more than one well.

With the Kasilof project, the two wells were drilled for about 75 percent of the cost of two separate exploration wells, Barnes said.

Multilateral wells were developed on the North Slope and are routinely drilled there but have not been done in Cook Inlet before, he said.

Marathon and other oil and gas companies have been finding and developing new gas reserves in the region in response to higher demand and higher prices.

The company now is producing from its new Ninilchik gas field, co-owned with a partner, Unocal Corp. Last year, the two companies completed the 25-mile, 12-inch Kenai-Kachemak Pipeline to link the new field with existing pipelines in the Kenai gas field near Soldotna.

Unocal itself has discovered new gas at Happy Valley, south of the Ninilchik field. A pipeline is planned to the new gas discovery, which is to be in production late this year.

Aurora Power LLC, a small independent company, also is developing small gas fields on the west side of Cook Inlet.